Hello Investors,
We have a 1×2 put spread position on in PayPal (PYPL) that is a great spot. However, with expiration this Friday, if the stock ticks higher we could easily end up with zero profit. So, we have hedged that through buying a few stock shares to get delta neutral from current prices. We are likely to hold this stock position along with the spread into Friday’s expiration. If the stock can go lower, our profit increases even further because the spread will end up making more than the hedge losses. If the stock goes higher, the hedge improves our trade to make some gain even if the spread ends up worthless.
Bought 34 shares of PYPL at 62.65 per share.
Have a great week!